RIM originally offered 16 GB, 32 GB, and 64 GB models at identical prices to market leader Apple, Inc.'s (AAPL) iPad. But customers seemed uninterested in a $500 USD entry price for a 7-inch tablet -- especially that 7-inch tablet. The tablet earned mixed reviews from most major news publications, with many arguing that its downsides made in remarkably inferior to the iPad and Android tablets.

Now RIM has officially axed the 16 GB SKU, writing to Engadget:

RIM will no longer be making the 16 GB model of the BlackBerry PlayBook tablet. The 16 GB PlayBook will continue to be available for distributors and retailers while quantities last. We continue to remain committed to the tablet space and the 32 GB and 64 GB models of the BlackBerry PlayBook continue to be available from our distributors and retailers around the world.

There is more value for our customers in the higher capacity models (32 GB, 64 GB), and as such we have decided to focus our efforts here.

The 32 GB model now sells for $278.59 on Amazon.com, Inc.'s (AMZN) page, a 53 percent mark-down of the original asking price of $599. The 64 GB model's price was slashed 57 percent from $699 to $299.98.

Many microSD cards, especially the ones with higher Class numbers i.e. Class 10, are designed for sequential read/write. It's great for cameras because they deal with high file sizes most of the time and it's mostly sequential. Put them inside a smartphone/tablet and it's going to choke as a system drive due to very weak random performance.

Internal NAND is always going to be faster, more reliable and more responsive than the absolute best microSD can offer.

Yeah I know, but for the guy who buys a 64gb iPad or Playbook, he just needs more class 2 room to store crap on. For the same reason that you have a hard drive in a desktop. But since neither of these manufs include a microSD port, we have no choice but to pay out the wazoo or not buy at all. And I'm not buying.